State government needs structural reforms to bail itself out, says public policy director

The director of the Empire Center of New York State Policy warned Hudson Valley business people that 1.5 million New Yorkers have fled the state in the last decade. That means less personal income tax revenue to contribute to the state budget, said E.J. McMahon, director of the Empire Center for New York State Police.

McMahon spoke to the annual luncheon of the Council of Industry in Newburgh Friday.

He said the collapse of the state’s economy was caused, in part, by an over reliance on high income taxpayers and the financial sector coupled with unsustainable spending in the state budget. The state continued to increase spending even after the financial collapse, McMahon said.

While stimulus money makes up for some of the difference this year, it is not something a budget should rely on for future growth and spending, he said.

McMahon offered a number of possible steps that could help the state get back on its feet including a freeze on public sector salaries for at least three years and reforms to the state employee benefit plans.

He also suggested privatizing opportunities to save money such as the New York State Bridge Authority, certain SUNY hospitals and campuses, golf courses and ski areas.

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The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.